Freebies or markdowns: which do you prefer? A report claims that most customers prefer the wrong one.
While most us love a sale, a new study finds that simply lowering prices doesn't get people to buy more.
But it finds that adding a free bonus does.
Shoppers ignoring lower prices
JC Penney made headlines in the past couple of years with a new everyday low price strategy. But shoppers, for the most part shrugged, and sales dropped 15 percent. Why?
A study by the Journal of Marketing claims shoppers prefer bonuses, like BOGO (buy one get one) to markdowns, or a small freebie like a scarf, bracelet, or even a free tube of lipstick.
It did a test where a store marked down a product 35 percent for a week, then offered "50 percent more free" for a second week.
The store sold much more with the 50 percent free promotion, even though it was not the better deal. The markdown actually was a better value.
Doesn't that stink?
And from the "doesn't that stink?" file, what this means to you. It means that stores have found a way to avoid huge markdowns, but still make you think you are getting one.
Doesn't that stink?
So next time you see an an ad promising a free scarf if you buy something, you'll know the reason.
That little freebie sells more products than a big markdown. It's all basic psychology.
Follow John on Twitter (@JohnMatarese)
Sign up for the free DWYM Newsletter delivered twice-weekly to your inbox
Harley-Davidson recalls big motorcycles
Harley-Davidson has recalled about 46,000 of its motorcycles with a problematic clutch system.
Angie's List: Protecting your family from radon
You can't see it, smell it or taste it, but radon is in the soil across the U.S. and it could be seeping into your home.
Can a Certified Pre-Owned Car have been wrecked?
John Matarese looks into one car buyer's unusual discovery
Now Hiring: 1,500 openings available at job fair
Job hunters will have the opportunity to meet and greet dozens of employers at a job fair Tuesday on the city's west side.
ISP warns against fraud IRS calls, ID thieves
Indiana State Police are warning Hoosiers about fraud calls from identity thieves pretending to be the IRS.
Angie's List: DIY vs. hiring professional mover
A family on the move knows moving isn't cheap, so do you DIY or hire someone to help?